Hobson v. Stevenson

The Chancellor : On the 18th of Feb., 1871, the de [204] fendant, the E. & Ky. R. R. Co., recovered a judgment against its co-defendant Stevenson, and afterwards Stevenson bought up a note of the company for a larger amount, and filed bis bill in this court to have the note set off against the' judgment upon the ground of the insolvency of the company . Such proceedings were had in that suit, upon default of the company, that the said Stevenson obtained a decree at this term in conformity with the prayer.of his bill. Thereupon this bill was filed claiming that the judgment against Stevenson was rendered upon his subscription to the capital stock of the said E. & Ky. R. R. Co., and that, on the 20th of June, 1866, E. S. Cheatham, President of said company had, under a resolution of the Board of Directors, conveyed, by deed of that date, to complainant E. A. Fort, in trust for creditors therein named, “all the uncollected stock remaining due upon the books of said company not heretofore assigned,” which deed was duly proved and registered, and that the stock of Stevenson passed under this deed. The complainants claim the benefit of the trust as sureties of the creditors secured, and as having paid the debts. Stevenson demurs upon the ground, among others, that the registration of the deed of trust was no notice of the assignment of the choses in action therein mentioned, that Stevenson never had actual notice of the assignment, and that his rights acquired by set-off and decree were superior to those of persons claiming under the assignment, the assignment of a chose in action not being perfected until actual notice given by the assignee to the debtor. The position assumed by the demurrer is not contested, and could not be, as I have had occasion to hold at this term. The assignment of a chose in action is not complete until notice to the debtor, and registration of the assignment is not notice within the requirement of the law. Allen v. Bain, 2 Head, 100. The argument of the complainants’ counsel is that this doctrine has no application to the “ uncollected stock ” subscription in question, because such subscription is assignable [205] so as to pass tbe legal title to tbe assignee under tbe Code, § 1967, and that wherever tbe cbose in action is assignable by statute, notice is not necessary. Mutual Prot. Ins. Co. v. Hamilton, 5 Sneed, 277; Sugg v. Powell, 1 Head, 224. Conceding that tbe subscription in question was assignable under tbe Code, § 1967, tbe assignment, to produce tbe result contended for, must be accompanied “by actual manual delivery” to tbe assignee, or something equivalent, which is not averred in the bill. This is essential even in the case of a negotiable security; Gayoso Savings Inst. v. Fellows, 6 Cold. 467, 471; and a fortiori in tbe case of a non-negotiable instruments assignable only under tbe statute. Tbe bill in this case by claiming tbe benefit of tbe judgment in the name of tbe E. & Ky. R. R. Co., implies, if it does not expressly concede, that tbe possession of tbe cbose in action sued on was always with tbe company, otherwise the action was not maintainable in its name except for tbe use of tbe assignee. In tbe absence of positive averment to tbe contrary, tbe presumption of law would be that tbe cbose bad never been delivered. And even if tbe assignment bad been fully consummated, and tbe suit bad been brought for tbe use of tbe assignee, although not so expressed in tbe record of tbe proceedings, a court of equity would not lend its aid to tbe assignee to enable him to coerce payment from tbe judgment-debtor, if be bad actually paid tbe nominal plaintiff without notice of assignment, or otherwise incurred loss, or acquired rights upon tbe faith of tbe actual ownership being in tbe nominal plaintiff. Cowan v. Shields, 1 Tenn. 314; 6 Cold. 467, ut supra. Catron v. Cross, 3 Heisk. 584. To bold otherwise would make this court an instrument for tbe enforcement of a legal right contrary to equity and good conscience. To entitle tbe assignee, to its aid there must be a positive averment of knowledge on tbe part of tbe debtor of tbe assignment previous to settlement with the nominal .plaintiff, or tbe acquiring of tbe rights which are sought to be set aside by tbe bill. [206] Tbe demurrer must be sustained, and the bill dismissed with costs.